Save On Interest Rates With A Balance Transfer On A Mortgage Loan
by Khalid Ahmad Finance ConsultantFinance
Save On Interest Rates With A Balance Transfer On A Mortgage
Loan
A loan
against property may be the largest external financing that you avail over your
financial lifetime. Mortgaging a property to avail a long-term loan is
beneficial when you seek a high amount. This amount stretches with tenors over
two decades to ease repayment. The lower rate of interest also keeps the EMIs
affordable.
The total
payable interest is considerably high even though the rate of interest is low
as these loans have a prolonged repayment tenor. Hence, searching for the right
lender is essential when you look for a loan against property. Opting for loan balance transfer
is the only option to avail if you have already availed financing with a high
rate of interest. Since the NRI Personal Loan in India has
become very popular.
What Is A Balance Transfer Facility?
A balance
transfer facility lets you transfer the outstanding amount on your loan against
property to another lender for a lower rate of interest. Transferring your loan
balance enables you to enjoy more affordable EMIs.
Benefits Of Balance Transfer Facility
One of the
most beneficial loan against property features that you get with a balance
transfer facility is a top-up loan. A top-up loan is a high-value unsecured
loan that standard personal loans don’t provide. You can use these loans for
any purpose without any restriction. With this you can also start saving money
with PPF account, now you can open
PPF account online within minutes.
When To Avail Balance Transfer Facility?
You have to consider the tenor before you opt for a loan against
property balance transfer as the total interest you save on your EMIs depends
on it.
Calculation of EMIs -
Financial
institutions may provide a repayment schedule that includes the breakup of your
EMIs throughout the loan against property tenor. They calculate your EMIs based
on amortisation.
Your
monthly instalments remain equal throughout the repayment tenor if you are
paying a fixed rate of interest. However, the portion of interest and principal
are not the same throughout. And it is advisable to open HDFC DEMAT account
The
interest portion is high during the earlier part of the tenor. It decreases and
the principal increases over each EMI.
Hence,
opting for a balance transfer when the tenor is about to end is not beneficial.
It is lucrative during the early years of repayment.
Not
calculating you EMIs is one of the things to avoid when you avail a loan
against property.
Things To Remember Before You Apply For A Loan Against
Property Balance Transfer:
1. You May Have To Pay Fees
And Charges
Your
current lender may charge you a foreclose fee. However, you don’t incur this
fee if you have paid a floating rate of interest instead of a fixed rate of
interest on your loan against property in India.
The new
financial institutions may need to pay processing fees, stamp duty, valuation
charges, technical charges, legal charges, incidental charges, etc. You may
have to pay Memorandum of Deposit of Title Deed (MODT) in case you are from a
specific Tier I or Tier II city.
Hence, do
make sure to check all of the fees that you incur when availing a balance
transfer facility.
2. You May Have To Provide
Documents
The new
lender may need you to provide documents when you opt for this facility. Some
of the loan against property documents required to avail balance transfer:
●
KYC
documents – PAN or Aadhaar.
●
Bank
account statements of the previous 3 months.
●
Income tax
returns.
●
Address
proof – any KYC document with your permanent address, municipality tax receipt,
latest utility (electricity, telephone, landline mobile, etc.).
● Photocopies of the property documents to be
mortgaged.
Be advised
that the lending institution may ask for additional documents other than the
above.
You must
also satisfy the loan against property eligibility criteria of the new lender.
Use property calculator
to calculate the EMI amount you have to pay monthly or yearly. Companies like
Bajaj Finserv need you to be between the ages of 33 and 58 years if you are
salaried and 25 and 70 years if you are self-employed to become eligible for
these loans.
Sponsor Ads
Created on Aug 15th 2019 02:00. Viewed 722 times.